Calling Foul on Risk Aversion and the Stimulus

Like Atrios, I don't believe this--nor would any person who takes mass transit or lives in (or near) an urban area:

Last month, I spoke to Christina Romer, Larry Summers and Jared Bernstein on this question. The three of them were arguably the administration's most persistent and consistent advocates for more stimulus. But they all said the same thing: The bigger the stimulus became, the harder it got to spend.

"We had a hard time spending $800 billion quickly, and with that much stimulus, the issue of diminishing returns could be important," said Romer. "I don't believe we could have efficiently and effectively put that large a stimulus to good use with requisite accountability," Bernstein said. "It would not have been possible to move vastly more money into quick trigger infrastructure projects," Summers said.

Ezra Klein needs to stop drinking the Washington Post's water or something. If you gave Boston Mayor Tom Menino $500 million, he would find a way to spend it. Would all of it be perfect goo-goo, progressive-approved--and most importantly, utterly scandal-free stuff? Maybe not. But the city's infrastructure needs a drastic overhaul, libraries are being closed and hours cut, and so much more. Likewise, you could easily throw $1 billion at the MBTA and it still wouldn't be enough.

There was plenty to do. There still is plenty to do. And I've never heard of a politician who returns money because she can't find a way to spend it. But the Obama administration was terrified that the Republicans would find any instance of graft or stupidity and pounce on it (of course, the graft would have been as likely to occur in Republican districts as Democratic ones). Because the Republicans only offer 'fair and balanced' criticism (to use a phrase), and only attack when it's legitimate.

It wouldn't have been hard for a new president, faced with a nation worried about jobs, to make the argument that even though mistakes will be made, the alternative would be keeping millions out of work.

The other issue is the whole 'shovel-ready' fetish. They clearly didn't think that the loss of $8 trillion dollars of housing worth and the ensuing recession was going to be long-term (why I don't know). If they had, it really wouldn't matter if it took 12 - 18 months to get a project off the ground, since the unemployment would still be there.

The bottom line is that Obama, who always stressed deficit reduction, never was interested in infrastructure rebuilding. He was more concerned about deficits instead of jobs.

And that's worked very well so far.

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Be fair - OK, they could have spent the money, but they would have risked actually improving people's lives in the process. Some risks just aren't worth taking.

They took care of their rich friends and called it a stimulus.

Please note: This has no bearing on the economic theory about stimulus spending. I have no problem with that.

By Abdul Alhazred (not verified) on 10 Aug 2011 #permalink

But the Obama administration was terrified that the Republicans would find any instance of graft or stupidity and pounce on it

Despite the administration's precautions, Republicans actually did pounce on any instances of graft or stupidity they found. Anyone paying attention to politics in this country and not paid to ignore such things could have foreseen this result.

It's not any better out here in the countryside. Bridges are in bad shape, and in recent years many towns have had to divert maintenance funds to cover holes in the snow removal budget. It might be tough for my town to blow completely through $500M, but give us a million or two and we could do stuff with it. Give our rail people a billion, and we could have trains to Boston from most of this state's cities[*]. Improved bikeways would be nice, too.

[*]Though if I could get just one project to improve rail service to Northern New England, I would ask for a rail link between North Station and South Station. That would allow through and connecting trains to New York and beyond without the hassle of taxi to South Station or Orange Line to Back Bay Station from North Station.

By Eric Lund (not verified) on 10 Aug 2011 #permalink

It's hard for me to be surprised these days, but that utter crap takes the cake.

I can think of 13.9 million Americans who I am sure could find a way to spend it - to keep their houses, their clothes, and their kids fed.

I'm actually beginning to think - and Republicans would be worse how?

Not that I'm going to vote for them, but with friends like these...

But the Obama administration was terrified that the Republicans would find any instance of graft or stupidity and pounce on it

Something like have of the non-taxcut funds went to Republican governors. How, pray tell, did they hope to prevent "graft and stupidity" from happening when the money went to people who benefited not only directly but politically?

By D. C. Sessions (not verified) on 10 Aug 2011 #permalink

At the time of The Stimulus, our funding agencies told us to submit applications for mucha moolah. Somehow, we were never awarded any of that money. Which means there must have been many more applications, and that the system could have soaked up a lot more cash if it had been made available.

By Bayesian Bouff… (not verified) on 10 Aug 2011 #permalink

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I can think of 13.9 million Americans who I am sure could find a way to spend it - to keep their houses, their clothes, and their kids fed.I'm actually beginning to think - and Republicans would be worse how?
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